Minister of Finance

Ministry of Finance

Growth above EU average and decreasing sovereign debt also in coming years

May 8, 2019 4:18 PM

The Hungarian economy will remain on a course of growth above the EU average also in the coming years, and this will be combined with stable state finances and a decreasing sovereign debt, Finance Minister Mihály Varga said at a press conference introducing the Convergence Programme for the period between 2019-2023.

The Finance Minister highlighted that economic policy measures will continue to focus on supporting Hungarian families and maintaining economic growth.

Last year the Hungarian economy expanded at an unprecedented rate, by 4.9 per cent, the deficit of the budget was lower than expected, amounting to 2.2 per cent, while the unemployment rate decreased from above 11 per cent in 2010 to 3.6 per cent, Mr Varga cited the figures.

He said the goal of the government is to keep the performance of the Hungarian economy at a high level, minimum two percentage points above the EU average. The deficit targets will remain as indicated earlier: this year the deficit to GDP will be 1.8 per cent, next year it will drop to 1.5 per cent, while we may reach a zero balance by 2023.

Parallel with this, the ongoing, gradual reduction of the sovereign debt will also continue, and the sovereign debt rate could fall to below 60 per cent by the end of the government’s term. The continuous improvement of competitiveness is key to the strengthening of the Hungarian economy; in harmony with this, fiscal policy will continue to focus on reducing taxes on work and the burdens of businesses, improving the efficiency of the collection of taxes, and simplifying taxation.

As a result of new types of employment policy measures, even more people could return to the realm of work, and unemployment could fall to below 3 per cent already next year. Meanwhile, supporting families raising children and young married couples will continue to remain a priority, Mr Varga stressed.

Between 2013 and 2018, the Hungarian economy grew by more than 20 per cent which is almost double the EU average. The domestic employment rate is close to 70 per cent, while Hungary’s unemployment rate is the fifth lowest among Member states, the Deputy State Secretary for Finance Policy said. László Balogh highlighted that in coming years Hungary’s growth policy focusing on competitiveness will have a positive impact on a number of areas of the economy, in addition to the favourable development of the individual indicators.

The Convergence Programme is available on the right-hand side of the page, under Related documents.